GENERIC PATENT SETTLEMENTS RISE, FTC STUDY CONCLUDES

Published Online: Thursday, March 1, 2007

Follow Pharmacy_Times:

Researchers for the Federal Trade Commission's (FTC)
Bureau of Competition are reporting a sharp upsurge in
settlements of drug patent disputes between generic and
branded pharmaceutical companies, a trend that could
have major implications for the availability of less costly
generic medicines in the future.

The FTC study identified 28 final settlements involving
drug patents during fiscal year 2006, and in half of them
the branded manufacturer paid some form of compensation
that delayed the introduction of a generic product. In
contrast, the FTC said that during the previous year only 3
drug-industry settlements included provisions under
which the generic introduction was delayed after compensation
was paid by the branded company.

According to the FTC, the compensation to the generic
firms took different forms, including: (1) payments for copromoting
the brand product; (2) payments for supplying, or
being available to supply, the brand with raw material or finished
drug product; (3) an agreement by the brand not to
compete with an authorized generic; (4) payments for intellectual
property to the brand; and (5) payments as part of a
codevelopment project between the brand and the generic.

The federal researchers also found settlements that
restricted the generic company from marketing products
that were not the subject of the litigation. "This restriction
appeared in 5 of the settlements, and in all them the
generic received compensation," the FTC said.